SINGAPORE - From Jan 1 next year, eligible public servants can be re-employed after they turn 65, up to the age of 67.

The move will benefit about 800 officers who turn 65 next year, the Public Service Division (PSD) said on Thursday.

The announcement was welcomed by the labour movement, which has been pushing for legislation to raise the re-employment age to 67. This will make it mandatory for companies to offer to rehire their workers after they turn 65.

Currently, companies that do this, do so on a voluntary basis.

The PSD's announcement comes three days after news that from January next year, the Government will offer incentives to firms that voluntarily re-employ workers past the age of 65.

Public officers are currently offered re-employment when they turn 62, the statutory retirement age, up to the age of 65.

But public agencies are already voluntarily re-employing officers beyond age 65, if the officers wish to continue working and they can contribute to the work of the agencies. There are about 1,000 public officers re-employed beyond the age of 65 today.

The PSD's announcement on Thursday formalises such arrangements.

Eligible public officers who wish to continue working, can do so on the same job with the same pay and benefits, if the job is available.

Otherwise, they will be helped to find suitable jobs within or outside their agency. If none is available, they will be paid by the agency to help make the adjustment while they look for another job.

These PSD guidelines for re-employment are based on the recommendations made by the Tripartite Committee on Employability of Older Workers on extending the re-employment age.

In its statement, the PSD quoted its deputy secretary of policy James Wong, who said: "Re-employment allows the public service to continue tapping on our seniors' wealth

of knowledge and experience. It also allows our older colleagues to remain meaningfully engaged.

"I am glad to work alongside several of our re-employed colleagues who, in addition to contributing to our work, also help to mentor and coach our younger officers," he added.

Labour chief Lim Swee Say said the development would help pave the way for more companies in the private sector to do the same.

The PSD is one of Singapore's largest employers, with 139,000 officers.

"Raising the re-employment age to 67 is going to happen sometime in the future, even though we are not ready to pass the legislation today," Mr Lim, the secretary-general of the National Trades Union Congress told reporters on Thursday after an awards ceremony.

As such, it is important for companies to begin to adjust their policies for older workers now, so that the transition can take place smoothly, he added.

Employers have said that they are open to rehiring older workers but are worried about costs such as wages and medical bills.

In response to their concerns over costly healthcare benefits, Mr Lim pointed to the proposed MediShield Life which will cover all workers of all ages for life.

Building company benefits on top of MediShield Life would ease the burden on employers and better protect workers at the same time, he added.